Could China high-speed rail technology compete overseas?

No less than Premier Li Keqiang {李克強} has been pitching China’s high-speed railway technology around the world.

His last stop was Thailand where China is competing for US$12.8 billion worth of high-speed train systems with established players such as Japan, France and South Korea. That is just the initial phase of what could be ultimately one of the region’s biggest rail investments, according to Thailand newspaper The Nation.

Li used an industry fair in Bangkok to launch the pitch — to no less than his Thai counterpart, Yingluck Shinawatra.

And he lost no time stressing that China’s rail technology is “advanced, safe, reliable and economically competitive”.

That is a compelling line any salesman would die for and any buyer would dearly love to call his own, but are Chinese train makers up to it?

To begin with, China does not have an indigenous train manufacturing industry. Although 70 percent of high-speed railway parts are developed domestically, the other 30 percent — presumably critical components technology — are imported.

These come mainly from Japan’s Kawasaki Heavy Industries, France’s Alstom and Canada’s Bombardier. Since 2005, when these imports of key parts and technology began, China has slowly learned the nuts and bolts of train making.

That raises some issues such as whether China can use patented technology from its suppliers to sell railway equipment to third parties.

According to Yicai.com, most of the high-speed train core parts such as wheelsets, axles, electronics and even software are imported.

China’s core advantage is lower cost. Even Japan, one of China’s main rivals for the Thai project, concedes that China would probably win the tender.

For perspective, Japan’s Shinkansen bullet train is safer, more reliable and more comfortable than any China has built, but the unit price of a Chinese high-speed train is half that of its Japanese competitor.

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